By identifying companies that are about to experience a change in debt rating, an investor or manager can speculate on that change and possibly make a profit. For example, assume a manager is considering buying junk bonds in a company, if the manager believes that the company's debt rating is about to improve, which is a signal of relatively lower default risk, then the manager can purchase the bond before the rating change takes place, and then sell the bond after the change in rating at a higher price.
Investment dictionary. Academic. 2012.
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Credit analysis — is the method by which one calculates the creditworthiness of a business or organization. The audited financial statements of a large company might be analyzed when it issues or has issued bonds. Or, a bank may analyze the financial statements of … Wikipedia
Credit analysis — The process of analyzing information on companies and bond issues in order to estimate the ability of the issuer to live up to its future contractual obligations. Related: default risk * * * credit analysis credit analysis ➔ analysis * * * credit … Financial and business terms
credit analysis — Evaluating information on companies and bond issues in order to estimate the ability of the issuer to live up to its future contractual obligations. Related: default risk. Bloomberg Financial Dictionary * * * credit analysis credit analysis ➔… … Financial and business terms
Judgmental Credit Analysis — A method of approving or denying credit based on the lender s judgment rather than on a particular credit scoring model. Judgmental credit analysis entails evaluating the borrowers application and using prior experience dealing with similar… … Investment dictionary
International Bank Credit Analysis — A company which rates the credit worthiness of banks. See also Bank Research for Eastern Europe, European Bank for Reconstruction and Development, Euronotation and Standard & Poor … International financial encyclopaedia
Comparative credit analysis — A method of analysis in which a firm is compared to others that have a desired target debt rating in order to infer an appropriate financial ratio target. The New York Times Financial Glossary … Financial and business terms
comparative credit analysis — Fin an analysis of the risk associated with lending to different companies … The ultimate business dictionary
comparative credit analysis — Comparing a firm to others that have a desired target debt rating in order to deduce an appropriate financial ratio target. Bloomberg Financial Dictionary … Financial and business terms
analysis — a‧nal‧y‧sis [əˈnælss] noun analyses PLURALFORM [ siːz] [countable, uncountable] 1. a careful examination of something in order to understand it better: • The researchers carried out a detailed analysis of recent trends in share prices. •… … Financial and business terms
credit analyst — ➔ analyst * * * credit analysis UK US noun [C or U] (plural credit analyses) (also credit appraisal) ► FINANCE, BANKING a calculation of the risk of lending money to a particular person, company, or government based on their ability to pay it… … Financial and business terms